Rubber output drops 20% in April-August

Prolonged rains in the rubber producing states of the country has resulted in a decline of close to 20 per cent in production in the first five months (April-August) of the current financial year.

The production of natural rubber during this period declined to 2,51,220 tonnes compared with 3,08,660 tonnes during the same period last year. The production estimates for 2007-08 is 8,74,000 tonnes. Despite the initial hit, industry experts said the situation would improve once the peak season of rubber production begins in October.

"The peak season is during October-January, which will account for around 45 per cent of the annual production," said Rubber Board Chairman Sajen Peter.

On the one hand, rising crude oil prices may have badly hit the production of synthetic rubber. This has lead to an unexpected rise in demand for natural rubber, which could be met through high stockpiles (92,000 tonnes), around 60 per cent more than what the country had in store last year till August, he said. The country is expected to consume 8,53,000 tonnes in 2007-08.

Since the consumption and production levels of natural rubber worldwide are foreseen to be close, Peter said, the market could be highly sensitive to seasonal, currency and speculative factors. At present the current ruling prices of rubber are around Rs 90 a kg, up over 300 per cent of the prices in 2000-01, when rates hovered at an average of Rs 30 a kg.

Currently, the rubber plantation in the country covers 60,000 hectares. "In 10 years, we need to double the acreage. Northeastern states will play a vital role in augmenting it. Within the eleventh five year plan (2007-12), the country would add up to 25,000 hectares," he said.

At present, the yield per hectare in the country is 1,879 kg. "Till last year, we were next to Thailand. Now the country has notched up to top position. For 2008-09, we expect the growth in production around 3.7 per cent," he added.

Since October last year, the rubber futures market saw an abrupt rise, which culminated in soaring domestic rates.

At a time when the production was in excess, Peter said, there was no reason for the domestic price to rule above international rates.

"In this connection, departments concerned are seriously looking into the matter. There is a need for a tough stand against speculators manipulating the natural rubber futures," he cautioned.